Vatican officials are expected to vigorously fight a suit stemming from problems at insurers once associated with the financier Martin Frankel.[@@]
The suit, filed in federal district court by Mississippi Insurance Commissioner George Dale, claims the Holy See violated the federal Racketeer Influenced and Corrupt Organization Act in connection with the disappearance of more than $200 million that has been alleged to have been masterminded by Frankel.
Damages could reach $600 million.
A ruling on a dismissal is expected this summer.
A Vatican spokesman has denied the church profited from business dealings with Frankel or accepted funds he stole.
Historically, the Vatican has fought U.S. suits by claiming sovereign immunity. But this case focuses on the Vatican Bank’s involvement.
Lee Harrell, deputy insurance commissioner, says the commissioners in Arkansas, Mississippi, Missouri, Oklahoma and Tennessee “thought long and hard” before taking such action.
“Any lawsuit is very important but suing the Vatican was something the commissioners combined and the staff they brought in debated back and forth and based on the facts presented with thought it was something we needed to do,” he says.
Frankel fled to Europe in 1999. He was extradited and pled guilty 3 years later in Mississippi to stealing $208 million in 5 states.
Just before Frankel’s mansion burned down in 1999 along with much of the evidence in the case, Dale summoned Frankel and lawyers and priests with Vatican ties to discuss the case.
The previous year Frankel had formed a bogus charity known as the St. Francis of Assisi Foundation that ultimately was used to funnel more than $434 million in bogus insurance company policies.
Frankel’s connection with the Vatican was New York attorney Thomas Bolan, who introduced him to a number of financial figures in Rome.
Harrell says that at one point shortly before the scam broke he noticed that 3 insurers were purchased by St. Francis but never filed proper “change of control” forms.
An attorney for the Mississippi department said that even if the Vatican did not profit from the St. Francis connection officials there still could be held responsible if they were aware of a conspiracy.